Ireland's rising cost of borrowing is a threat to the belt- tightening steps taken by Government, An Bord Snip author Dr Colm McCarthy said.
Interest rates on Irish bonds was 5.6% today, almost 3% higher than German bonds.
That higher rate adds to the cost of the State's borrowing every time the National Treasury Management Agency raises money.
Speaking to Reuters, Dr McCarthy said: 'The big problem for Ireland right now is what's happening in the euro zone sovereign debt market.'
He said if rates remain above 5% 'it makes things very challenging.'
'On the ultimate exchequer cost of the banking collapse we don't really know what it's going to be yet, it's clear it's going to be sizeable,' McCarthy said.
'How manageable any figure is depends on the bond market',' he added.
